The amendments result from the transition of responsibility for
oversight of local government audits to the Office of the Auditor
General.
In September 2017, the Department provided advice in Circular 16-2017
regarding proposed changes to the conduct of local government audits and
financial management.
Following consultation with local government in line with the
State Local Government Partnership Agreement, the proposed amendments to
the Local Government (Financial Management) Regulations 1996 and Local
Government (Audit Regulations) 1996 were revised and gazetted on
Tuesday, 26 June 2018.
The key changes affecting local government are as follows:
- From
1 July 2018, an asset is to be excluded from the assets of a local
government if the fair value of the asset as at the date of acquisition
is under $5,000. CEOs must take all reasonable steps to prevent the
theft or loss of non-consumable portable and attractive items valued
under $5,000.
- From 27 June 2018, local governments will be
required to conduct a review of their audit systems and procedures, and
their financial management systems no less than every three years.
Previously local governments were required to conduct these reviews no
less than every two years and four years respectively.
- From 27
June 2018 local governments will be required to revalue an asset
whenever the local government is of the opinion that the fair value of
the asset is likely to be materially different from its carrying amount;
and in any event, within a period of at least 3 years but not more than
5 years after the day on which the asset was last valued or revalued.
- From
27 June 2018, the role of the audit committee has been strengthened to
assist the CEO to carry out the reviews of audit systems. The Audit
Committee's responsibilities have also been extended to 'monitor and
advise' the CEO in reviews conducted into financial management systems
and audit systems and procedures. The Audit Committee will also support
the auditor as required and have functions to oversee the
implementation of audit recommendations made by the auditor, which have
been accepted by council; and accepted recommendations arising from
reviews of local government systems and procedures.
The
Guide to Local Government Auditing Reforms – June 2018 replaces the
earlier guide released in September 2017 and is available on the
department's website at www.dlgsc.wa.gov.au.
Duncan Ord OAM
DIRECTOR GENERAL
28 June 2018